Anatomy of a large claim: what plan sponsors don't see

A neonate in a California NICU. 102 days.

When the claim reached the plan sponsor's desk, the gross charges came to $8.6 million. Under a percent-of-charges contract with one of the Blues, the allowed amount was $3.5 million. That was the number the plan was preparing to pay.

That is not the number the plan ended up paying. After a pre-payment review, a line-by-line inspection of the itemized bill, and a check of the hospital's own machine-readable file against the contract on record, the allowed amount came down to just over $1.5 million. More than $2 million in savings on a claim the plan was one signature away from settling.

This example captures how much of a large claim lives outside the view of the people who ultimately pay it. A small fraction of claims drive the majority of plan spend, and that same fraction is often the least-examined portion of the plan. High-dollar events move through payment adjudication designed for volume, not scrutiny. And the parts of the claim that most need scrutiny are usually spread across three separate expert views that rarely land on the same page at the same time: 

• The medical bill and its line items.
• The drug dollars folded into that bill.
• The clinical decisions about where the care actually happened.

Each view, examined alone, catches a fraction of what's there. Together, they move numbers that plan sponsors, their consultants, and their stop-loss carriers can actually see and act on.

Where the dollars actually live

The largest and most complicated claims a self-funded plan will see almost always arrive as facility bills, such as:

• Inpatient stays.
• High-cost outpatient procedures.
• Extended NICU care.
• Complex oncology admissions. 

These claims move on a UB-04 (or the electronic equivalent, an 837). By the time they reach a plan sponsor's review, the network has already applied its contracted discount and produced an allowed amount.

That allowed amount is often accepted at face value. It should not be.

Brian Strauss, Co-Founder and EVP of Highlight Health, spends most of his time on the mechanics of these claims. His team works with plan sponsors on pre-payment claim review, and the pattern he sees on high-dollar bills falls into three consistent red-flag categories.

• Provider-side errors. Upcoding, unbundling, duplicate charges, services or supplies that shouldn't be separately reimbursed. In the NICU case, an itemized bill review identified more than $3 million in charges that could not be reimbursed separately under the network's own payment policy. Routine services and supplies were billed as though they were separate, chargeable line items.
• Payer-side pricing errors. Whether the discount the network applied is actually the discount that was negotiated. In the NICU case, the claim was priced against a percent-of-charges contract at 41.4%. When Highlight decoded the hospital's machine-readable file, the actual contract on record was a per diem at $14,761 per day. Applied across 102 days, the correct allowed amount was substantially lower than the network had already produced.
• Plan-sponsor-side process gaps. Whether the plan has a mechanism to review a large claim before payment goes out. Post-payment recovery is possible, but it is meaningfully harder than pre-payment adjustment. Every self-funded plan has this right. Not every self-funded plan has the operational structure to exercise it.

The Consolidated Appropriations Act of 2021 sharpened the fiduciary case for pre-payment review, but the legal ground is only useful if the plan has anchored it in contract structure. That means the review vendor's contracts sit with the plan sponsor as fiduciary, not with the carrier. It means the plan documents explicitly authorize itemized bill and medical record retrieval. And it means the vernacular used with counterparties is precise: Pre-payment review is not the same word as "audit," and the difference in what the network will allow can be substantial.

"Everyone asks for this stuff, but 98 percent of the time when we say no, they stop asking. You keep asking. And that's why you're able to get these things done."

— Brian Strauss, Co-Founder and EVP, Highlight Health

Behind the J-code: The drug cost the plan can't see

Facility claims get attention because they're facility claims with obvious complexity. But a large portion of what makes a claim high-dollar in the first place is not the facility itself. It is the drug administered inside it.

Specialty infusion drugs sit on the medical benefit, not the pharmacy benefit. They're billed under a J-code or Q-code, and the drug cost is bundled into a total allowed amount along with an administration fee and the provider's negotiated margin. The plan sees the total. The plan does not see the components.

Jeff Auten, PharmD, Director of Clinical Consulting at Leaf Health, works with TPAs and brokers on the pharmacy layer of these claims. He describes the visibility problem plainly. On the pharmacy benefit, a PBM has real-time claim data and a set of utilization tools refined over decades. On the medical benefit, under buy-and-bill, the payer often does not see a specialty infusion claim until after the infusion has been administered. The window to influence the decision closes before it opens.

That timing gap matters because specialty infusion has enormous cost variance. A single J-code drug can range from a couple thousand dollars per infusion to tens or hundreds of thousands. And the site of care where it's administered affects the cost substantially. The cost hierarchy, high to low, runs from hospital outpatient department to physician office to ambulatory infusion center to home.

The most common blind spot is treating the drug question and the site-of-care question as separate levers. Jeff's example lands as sharply as any:

"We may be evaluating what other lower-cost options are there that would be appropriate for the patient. We find one that's $30,000 that could be appropriate. Let's see if we can get the provider to change to this medication. Great, that's going to be $70,000 in savings. Well, the issue is, that's just an estimate. We didn't change the site of care. So we're still in this hospital outpatient setting. Now there's a price markup on the medication, and this $30,000 estimate comes all the way up to $80,000 or $85,000. We're barely saving any money from the preferred medication the provider wanted in the first place."

— Jeff Auten, PharmD, Director of Clinical Consulting, Leaf Health

The lever that actually works is both, in coordination. The right drug in the right setting.

Jeff's practical recommendation for plan sponsors is a claim trigger. A specific dollar threshold ($10,000 is a reasonable starting point), a list of J-codes and Q-codes that automatically flag for early review, or a treatment regimen that historically drives high spend. When the trigger fires early, the plan has time to confirm medical necessity, verify the diagnosis and lab work, review dose and regimen, direct the patient to a lower-cost site of care where clinically appropriate, and validate reimbursement before payment goes out. Once the infusion happens and the claim is paid, most of those levers are gone.

The clinical decisions about where care happens

Every dollar in a large specialty infusion claim traces back to a clinical decision that was made months or years earlier, such as: 

• Where the patient started treatment. 
• Where they defaulted for every subsequent dose. 
• Whether anyone told them there was another option.

Sofia Shrestha, PharmD, CSP, Senior Director of Clinical Strategy at Leap, spends most of her time on that upstream decision. Her clinical career has been almost entirely in specialty pharmacy and infusion, including at Fairview Home Infusion, and she’s published research on the safety of home-based infusion.

She often corrects an assumption that quietly persists across the industry: home infusion is not new. It has been available for more than 40 years. More than 3 million patients receive care through home infusion annually. It spans biologics, cancer immunotherapy, acute and chronic disease management. 

What has been documented, repeatedly, is the cost difference. A New England Journal of Medicine study reviewing more than 5 million infusion visits found that hospital settings markup specialty drugs 120 to more than 600 percent above acquisition cost. That range is the practical definition of what "the markup problem" looks like at the claim level, and it is why site-of-care optimization is not a small-dollar decision.

Sofia is careful to separate cost from clinical fit. Home infusion is appropriate for many patients on stable biologics, chronic maintenance regimens, or therapies with well-characterized reaction profiles. It is not appropriate for every patient on day one. First doses of certain drugs, patients with high-acuity comorbidities, patients without adequate caregiver support, and patients without reasonable access to emergency care all warrant a controlled setting.

A well-designed home infusion program clears that gap with a clinical assessment at intake:

• Treatment history. 
• Comorbidities.
• Home situation (electricity, clean water, storage).
• Distance to an emergency department. 

Patients who are not home-appropriate on day one may become appropriate after a few controlled-setting doses at an ambulatory infusion center. And for patients who prefer a clinical setting even when home would be safe, the ambulatory infusion center is often overlooked entirely. It carries the same buy-and-bill problem as the hospital outpatient department only if the plan hasn't structurally addressed it. In a network that eliminates the markup at the source, an ambulatory infusion center becomes a legitimate mid-cost option rather than a compromise.

The safety evidence, across published studies, is consistent: hospital-based infusion centers and home infusion deliver the same clinical outcomes, with no increased risk of adverse reactions. For patients on immunoglobulin therapies for primary immunodeficiency, the evidence actually shows lower infection risk at home compared with shared infusion chair space in a hospital setting.

"Not all patients can be home infusion candidates on day one. But certainly having that information can help us route them to one of our infusion centers, which might be closer, deliver those cost savings, and provide high-quality care, while ensuring that it's clinically appropriate."

— Sofia Shrestha, PharmD, CSP, Senior Director of Clinical Strategy, Leap

The patient perspective matters as much as the safety math. A hospital-based infusion center is typically open 8 a.m. to 5 p.m. Monday through Friday. Working patients take time off, family time gets absorbed by the commute, and immunocompromised patients on IVIG or enzyme replacement share chair space with patients being treated for active infection. MS patients with mobility limitations make the commute anyway because they were never told there was another option. A five-hour IVIG infusion crowds the chair space of the center and reduces the plan's ability to schedule other patients efficiently. Site of care is a claim decision and a member-experience decision at the same time.

The two patterns that keep plans overpaying

Two patterns recur across every conversation about large claims.

• The isolated-lever problem. Reviewing the medical bill without reviewing the drug. Reviewing the drug without reviewing the site of care. Optimizing the site of care without validating the itemized bill. Each of these views, in isolation, catches a portion of the opportunity. None of them catches all of it.
• The reactive-versus-proactive problem. Once payment has gone out on a large claim, the levers available to reduce it collapse. Post-payment recovery is a real strategy, but it produces a fraction of what a pre-payment intervention would have produced on the same claim. The claims that most need coordination are also the claims that most reward early identification.

Timing does not need to align with renewal. Many of the highest-impact changes happen mid-plan-year. A single site-of-care shift on a Krystexxa patient or an Ocrevus patient can prevent a stop-loss laser at the next renewal cycle. 

What plan sponsors should be asking

Five questions worth bringing to the next benefits strategy conversation or the next stop-loss review:

1. Do we have visibility into what we are actually paying, at the line-item level, on our largest claims? If the plan sees only a bundled allowed amount, the plan cannot answer whether the price is defensible.
2. Do we have a pre-payment review mechanism, or only post-payment recovery? The right answer is both, but the vast majority of the opportunity lives before the check goes out.
3. For our largest infusion claims, are the drug question and the site-of-care question being reviewed together, or in isolation? Either one, alone, catches a fraction of the opportunity.
4. When was the last time our SPD language was reviewed against our operational reality? The rights to inspect bills, obtain itemized data, and act as fiduciary all trace back to contract structure. If those rights are not clearly written, they don't functionally exist.
5. Are our stop-loss carriers, TPAs, and clinical partners looking at the same large claim early enough to act on it? The coordination gap is often larger than any single-vendor gap.

None of these questions requires a change in vendor. They require a change in how the plan governs its highest-cost claims.

One claim, three perspectives, one number

The through-line across every claim reviewed by all three teams is the same: a large claim rarely produces its best outcome from one perspective alone. The medical bill is where dollars go missing to unbundled or duplicated line items. The drug dollars are where the markup lives. The clinical decision is where the patient experience is either preserved or degraded.

Leap operates on the clinical decision layer, with a structural change to the drug economics underneath it. Leap is structurally different. We negotiate specialty drug pricing directly with manufacturers and specialty pharmacies, bill the drug at true acquisition cost with no buy-and-bill markup, and itemize every claim so employers see the drug, the coordination, and the clinical delivery as separate line items rather than one bundled allowed amount.

That structural change works alongside, not against, the claim-review layer and the pharmacy-consulting layer. When a plan is running Highlight Health on pre-payment claim review, Leaf Health on pharmacy strategy, and Leap on the specialty infusion drug and clinical delivery, the three views converge on the same claim early enough to act on it. A single high-cost claim can be validated for accuracy, evaluated for site-of-care optimization, and rebuilt with transparent drug pricing, all before payment goes out.

Every Leap member is paired with a dedicated Care Guide, a licensed clinician who quarterbacks the member's journey across the prescribing physician, the specialty pharmacy, and the infusion nurse. The prescribing physician remains in charge of the care plan. The Care Guide manages the logistics that patients would otherwise navigate alone: prior authorization, scheduling, drug delivery, day-of coordination, and clinical support throughout the course of therapy. Over 90% of Leap members receive their infusions at home. The rest receive care in an ambulatory infusion center or Leap Transparency Network clinic when clinically appropriate.

"We have a 92 patient NPS. If you have a 92 NPS, you're giving patients a really great experience over and over again."

— Rob LaHayne, Co-Founder and Chief Commercial Officer, Leap

Working with Leap on the specialty infusion layer

Leap works with self-funded employers, unions, health plans, and TPAs to deliver transparent, high-quality specialty infusion care to their members. Coverage spans all 50 states through a national network of more than 10,000 licensed infusion nurses and more than 200 partner infusion centers, serving urban and rural populations.

The commercial model reflects the operating model. Leap collects fees from actual paid claims only, not through a PMPM or PEPM schedule. Plan sponsor and vendor incentives point in the same direction: Leap earns only when care is delivered, at a lower price than the current setting.

The first step in any engagement is a claims-based impact analysis. That analysis surfaces actual J-code spend, drug-by-drug variance across the plan, and the specific opportunity available on the plan sponsor's own claims. It sets realistic targets before any commitment is made, and grounds every downstream conversation in the plan sponsor's own data rather than in vendor claims.

To learn more about how Leap can transform your specialty drug spend, email us at info@leaphealth.com for an impact analysis. 

Meet the Experts

Sofia Shrestha, PharmD, CSP, Senior Director of Clinical Strategy, Leap. Sofia leads Leap's clinical strategy and care operations. She brings deep expertise in specialty pharmacy and infusion therapy, with a Doctor of Pharmacy (PharmD) from the University of Minnesota, Certified Specialty Pharmacist (CSP) credential, prior clinical roles at Fairview Home Infusion, and published research on the safety of infusion-related reactions in home-based settings. At Leap, she has built the clinical programs, the care navigation team, and the specialty drug list, and she leads outcomes data and clinical governance across the partner network.

Jeff Auten, PharmD, Director of Clinical Consulting, Leaf Health. Jeff has led the development of Leaf Health's clinical programs since November 2023. His pharmacy career began at Walgreens Specialty Pharmacy in 2016, where he managed 340B programs and patients with HIV and chronic inflammatory conditions. With more than eight years across specialty pharmacies, including a Pharmacy Manager role at Blue Sky Specialty Pharmacy, Jeff's expertise spans prior authorizations, infusion medications, copay assistance, and alternative funding.

Brian Strauss, Co-Founder and EVP, Highlight Health. Brian leads Highlight Health's stop-loss and TPA partnerships, working daily on the high-dollar, low-frequency claims that drive the majority of plan spend. Before co-founding Highlight Health in 2020, Brian was a Founding Partner of NextGEN Benefit Advisors. His work is built on a simple conviction: pay the right price, demand transparency, and build a fairer health system.